That’s the debate some North Carolina lawmakers are having in Raleigh.

State leaders have long talked about ways to simplify and strengthen the state’s tax codes, with the argument focused on creating a system to help grow the economy and help residents keep more of their paychecks.

One proposal among state lawmakers is increasing taxes on dozens of services to help lower or eliminate personal income tax – which currently makes up more than half the state’s budget.

What services are they talking about?

A variety of services have been discussed as part of the services tax proposal – including haircuts, pet grooming, massages, manicures, dentistry, advertising, real estate agent services, accounting services and arcade games.

How do economists see the sales tax?

Some see it as a discouragement to the item that’s taxed. They think why deter income and payroll? If things must be taxed, make it on things people consume.

The other side sees the services tax as a step back because it hits lower wage earners more.

Everyone would pay the same tax for each item or service, but that money would affect a smaller budget more.

What complicates the proposal to shift tax focus?

The role corporate income tax breaks and credits play in economic development. Those refunds are often North Carolina’s biggest incentive for luring jobs to the state.

Halifax Media Group and the Associated Press contributed to this report. Reach Matthew Tessnear at 704-669-3331, at mtessnear@shelbystar.com or on Twitter @MatthewTessnear.

What they’re saying …

“At this point, I have not seen a bill; I’ve only seen press reports. Years ago, I pledged not to vote for any new taxes; I plan to honor the pledge. I support cutting taxes and cutting wasteful spending.”

“I will not support any tax increases and will only support any changes to the tax code that reduce the overall tax burden. I wait to see the details of any proposals concerning tax reform but would like to see us move away from an income tax-based system.”

-- N.C. Rep. Tim Moore, Republican who represents Cleveland County in District 111

"We need to move from an income tax-based system to a consumption-based tax system because it should increase economic growth, which is good for our citizens. It removes the current tax system, which penalizes savings and investment."

“Tax reform is going to be one of the hottest issues to hit the state in recent years. Most everyone will agree there are many facets to overhauling the system. (The proposals) definitely shift the tax burden and many businesses that have never levied a sales tax will find themselves in the position of having to set up their operation to do just that. This will be an added expense to those businesses and may put them at a competitive disadvantage. What needs to be done -- that’s the $64,000 question. The current tax system is based on a product-driven economy, whereas today we are becoming more of a service-driven economy and that is why our tax system is not keeping pace.”

-- Michael Chrisawn, president, Cleveland County Chamber

"Tax reform is going to move this year. We are going to reduce corporate income tax and personal income tax -- lower corporate income tax to about 5.4 percent and lower personal income tax to 5.6 or somewhere near 5.9 percent. Then we'll be looking at what categories we can get to cover about $2 billion in that revenue. We'll likely have something by June to then implement by January of next year. It could be something we phase in."

-- Thom Tillis, NC House of Representatives speaker

Readers respond

The Star asked its Facebook fans what they'd rather pay more of -- taxes on income or services. Here's a sample of their response. To join the conversation, "like" The Shelby Star on Facebook.

"Taxes, are already killing us. I wish they would stop some of the free stuff, and let the people who are willing to work alone."

* Corporate income tax – 6.9 percent (companies that pay the full tax are those with operations in North Carolina. These taxes normally make up about $1 billion of the state’s roughly $19 billion budget

* Personal income tax – 6-7.75 percent, including a maximum that assesses North Carolina’s wealthiest residents the highest taxes in the Southeast.